The Photovoltaic-Thermal (PVT) system represents an advanced integrated heat and power solution, wherein the combined thermal and electrical efficiency correlates strongly with the heat transfer medium’s temperature within the PVT collector. This investigation utilizes experimental methodology and CFD-FLUENT simulation, employing water as the heat transfer medium. The study evaluates the thermal and electrical efficiency of the novel PVT system by modifying the collector’s inlet temperature of the heat transfer medium. Key experimental results demonstrate a baseline electrical efficiency of 16.74% without active cooling, while combined thermal-electrical efficiency peaks at 86.67% (28.0°C inlet) and decline to 53.92% (58.1°C inlet). Analysis of the PVT system’s instantaneous thermal efficiency curve indicates heat transfer initiation to the photovoltaic cells when the normalized temperature difference surpasses 6.153 (K·m2)/W. CFD simulations further reveal a non-uniform temperature gradient across cells, quantifying a quantified 1.17% efficiency loss per 1°C cell temperature increase. These findings underscore the novelty of the proposed system in optimizing energy conversion efficiency and provide valuable insights for enhancing PVT system performance under varying thermal conditions, positioning the PVT system a promising solution for residential applications.